Until the 1st July businesses and consumers in Germany had grudgingly become accustomed to paying a tax of €0.08 on every USB flash drive they purchased but from the 1st July this tax was increased to €0.91 on USB drives with less than 4GB of storage and to €1.95 on drives with more than 4GB of storage! That’s an eye watering increase of roughly 2,000%!!

ZPÜ, the body in Germany that controls the tax regime on blank media (including USB flash drives) has not exactly been forthcoming with reasons to justify these swingeing increases but local journalists point to a “too cosy” relationship between ZPÜ and GEMA (a body that represents thousands of recording artists).

Promotional USB Flash Drives

The tax and subsequent increases in the tax seem to have been implemented under the pretext of protecting and compensating the recording industry from the threat (real or perceived) of bootleg recording and distribution of music. A case against blank cassette tapes (does anyone still use these) seemed reasonable but to suggest that everyone buying a USB flash drives are buying them to copy and distribute music seems just plain wrong. USB sticks have significantly more uses than storing music – of the millions of USB flash drives that we have provided to schools, businesses and universities over the years we know that very few have been used to distribute music on.

Understandably some of the large memory manufacturers (Transcend and Kingston to name but two) are pretty unhappy with this tax increase and the damaging effect it’s having on their business in Germany but their year long dispute with the ZPÜ continues to rumble on with no sign of a happy conclusion.

Fortunately in the UK we don’t suffer from such a blinkered and punitive tax and as far as we know there are no plans to introduce one any time soon. Good news from our perspective at USB2U because demand for promotional USB flash drives remains high and that’s how we’d like it to stay!